AI Investor Coatue Launches Data Center Land Venture

As the data center frenzy continues across the country, Philippe Laffont’s Coatue Management is joining the rush at the land level.

Coatue launched the Next Frontier firm to purchase land that can be used for data center development, the Wall Street Journal reported. Coatue is prepared to spend tens of billions of dollars on the venture, which follows a myriad of investments into the artificial intelligence space.

Next Frontier, which was formed last year but didn’t start acquisitions until this year, is already pursuing its first project, buying land for a data center in Indiana. That project is a planned 430 megawatt complex in New Lebanon.

Coatue partners Robert Yin and former Blackstone executive Peter Wallace will lead the firm with oversight from Laffont. The Coatue leader is funding the firm, as are outside investors and the firm’s management company.

Anthropic is among the artificial intelligence companies Coatue is courting for its facilities. Coatue holds sizable stakes in both Anthropic and OpenAI, as well as data center infrastructure companies such as Vistra and GE Vernova.

Next Frontier already inked a joint venture with Fluidstack, which provides computing services for AI firms, including Anthropic. The two sides of the venture are talking about potential development projects.

The company has also invested in data center companies worldwide, such as Firmus in Australia, DayOne in Singapore and Scala Data Centers in Brazil, as well as investments in cloud company CoreWeave.

Coatue has plenty of competition. There are approximately 1,500 data centers under construction in the United States, according to Pew Research Center. McKinsey projects $7 trillion to be spent in the sector worldwide by the end of the decade.

But the sector is facing serious headwinds and opposition. Investors are demanding greater disclosure on site-level water usage and energy consumption to mitigate growing financial and environmental risks.

Local opposition, meanwhile, is increasing due to concerns over strained water supplies, rising power costs and land use, leading to project stalls and legislative actions such as proposed construction moratoriums.

— Holden Walter-Warner